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BT Monthly Markets Chart Pack – December 2009
An overview of movements in global financial marketsPrepared by BT Wrap for the adviser market
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Global share markets closed higher in December...
Global share market performance was very positive in December as concerns surrounding Dubai’s debt obligations eased after the United Arab Emirates’ central bank said that it would bail them out. In the US, the benchmark S&P 500 Index closed the month up 1.8% and this had a positive knock-on effect elsewhere, with markets in Japan (+12.8%), the UK (+4.3%) and Europe (+6.0%) also closing higher.
The Australian share market ended the year very strongly, with the S&P/ASX 200 Accumulation Index building on last month’s gains to close December 3.7% higher. Contributing to the gains were a jump in commodity prices – which helped to push mining heavyweights like BHP Billiton and Rio Tinto higher – and a strong lead from the US market.
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Global shares measured by the MSCI World ex-Australia (net dividends) Index in A$.Source: BT Financial Group, MSCI
Impact of major market events on global shares since 1987
…and continue to perform well over the long-term, despite some major market events
700
1,200
1,700
2,200
2,700
3,200
3,700
4,200
4,700
5,200
5,700
6,200
Dec-87 Dec-89 Dec-91 Dec-93 Dec-95 Dec-97 Dec-99 Dec-01 Dec-03 Dec-05 Dec-07 Dec-09
Jan 91Gulf War
Feb 94Bond Market Crash
Aug 97Asian Currency Crisis
Jul 98Russian Bond Crisis
Jul 01Tech Wreck
Sep 01Attack on Twin Towers
Jun 07US Sub-prime Crisis
Nov 89Fall of the Berlin Wall Mar 03
Troops enter Iraq
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Source: BT Financial Group, Premium Data
S&P/ASX 200 Accumulation Index – year to 31 December 2009
The Australian share market closed 3.7% higher in December
21,000
22,500
24,000
25,500
27,000
28,500
30,000
31,500
33,000
34,500
31/12/2008 28/02/2009 30/04/2009 30/06/2009 31/08/2009 31/10/2009 31/12/2009
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Key Australian economic news – December
The Australian economy added 31,200 jobs in November which helped to push the unemployment rate down to 5.7%.
The Westpac/Melbourne Institute’s consumer sentiment survey eased a further 3.8% in December – its second consecutive monthly decline.
Retail sales rose 1.4% in November, beating the market’s expectation of 0.3%.
National Australia Bank’s business conditions survey fell slightly in November, reflecting declines in both profitability and employment measures.
Newspaper job advertisements jumped 8.3% in November, though they remain well down in year-end terms (-18.7%).
Australia’s current account deficit was A$16.2 billion in the September quarter – a touch lower than what the market had expected (A$16.8 billion).
Source: BT Financial Group
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The Australian dollar closed the month lower against the US dollar
The Australian dollar (A$) fell against its US counterpart in December, losing 1.9% as expectations of further interest rate hikes by the Reserve Bank began to fade. It was the Australian dollar’s first monthly decline against the US dollar since January 2009.
At the end of December:
A$1 bought US$0.8972 -1.9%
€0.6266 +2.8%
¥83.35 +5.6%
Source: BT Financial Group
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Currency markets – A$ per US dollar
Source: BT Financial Group. Figures at 31 December 2009
0.6300
0.6600
0.6900
0.7200
0.7500
0.7800
0.8100
0.8400
0.8700
0.9000
0.9300
0.9600
0.9900
Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09
The Australian dollar versus the US dollar…
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Currency markets – A$ per Euro
the Euro…
0.4900
0.5050
0.5200
0.5350
0.5500
0.5650
0.5800
0.5950
0.6100
0.6250
0.6400
0.6550
Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09
Source: BT Financial Group. Figures at 31 December 2009
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and the Yen
55
60
65
70
75
80
85
90
95
100
105
110
Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09
Currency markets – A$ per Yen
Source: BT Financial Group. Figures at 31 December 2009
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Official world interest rate movements – December
Interest rates in the major economies remained largely unchanged in December. Australia was the only central bank to move, raising the official cash rate by 0.25% (to 3.75%) early in the month.
Current rate Last movedDirection of last move
Australia 3.75% Dec 2009
US 0% - 0.25% Dec 2008
Europe (ECB) 1.00% May 2009
Japan 0.10% Dec 2008
United Kingdom 0.50% Mar 2009
Source: BT Financial Group
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Source: BT Financial Group
31 December 2009
Global share market returns
1 year 3 years (pa) 5 years (pa)
Global
S&P 500 Index (US) 23.45% -7.70% -1.65%
Nasdaq (US Tech.) 43.89% -2.06% 0.85%
Nikkei 225 (Japan) 19.04% -15.09% -1.70%
Hang Seng (Hong Kong) 52.02% 3.09% 8.98%
DAX (Germany) 23.85% -3.34% 6.96%
CAC (France) 22.32% -10.78% 0.60%
FTSE 100 (UK) 22.07% -4.53% 2.37%
Australia
S&P/ASX 200 Accum. Ind. 37.03% -0.70% 8.36%
S&P/ASX Small Ordinaries 57.43% -4.80% 6.73%
S&P/ASX 300 Listed Prop. 9.56% -23.44% -7.48%
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Short-term asset class performance
Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A , UBS Bank Bill 0+ years
1-year rolling returns to 31 December 2009 (%) Best performing asset class for the year
2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994
Australian cash
3.47 7.60 6.73 6.02 5.74 5.62 4.90 4.77 5.24 6.27 5.01 5.14 5.63 7.57 8.06 5.34
Australian bonds
1.73 14.95 3.46 3.14 5.80 6.96 3.05 8.81 5.45 12.08 -1.22 9.54 12.23 11.87 18.63 -4.66
Australian property
9.56 -55.31 -8.36 34.05 12.70 32.18 8.81 11.85 14.99 18.79 -4.20 18.37 21.76 14.24 14.28 -6.32
Australian shares
37.03 -38.44 16.07 24.22 22.83 27.99 14.61 -8.77 10.36 6.36 18.74 9.80 12.67 14.35 21.10 -8.76
International bonds
8.04 9.23 6.63 4.41 6.62 8.92 6.62 11.57 8.29 9.74 0.28 10.08 10.71 9.48 20.62 -2.45
International shares
-0.30
-24.92 -2.60 11.49 16.84 9.94 -0.76 -27.44 -9.96 2.19 17.20 32.34 41.63 6.24 26.05 -8.43
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Source: S&P/ASX 200 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, Barclays Capital Global Aggregate Bond Index hedged to $A
1-year returns to 31 December 2009 (%)
Short-term asset class performance (cont’d)
0.3
8.0
37.0
9.6
1.7
-24.9
9.2
-38.4
-55.3
15.0
31 December 2008
31 December 2009
Australian bonds
Listed property
Australian shares
Global bonds
Global shares
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Long-term asset class performance
Note: Accumulated returns based on $1,000 invested in December 1984Source: S&P/ASX 300 Accumulation Index, MSCI World ex-Australia (net dividends) Index in A$, S&P/ASX 300 Property Index, UBS Composite 0+ years index, UBS Bank Bill 0+ years
31 December 2009
Australian bonds
Listed property
Australian shares
Cash
Global shares
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Source: BT Financial Group. West Texas Intermediate oil price at 31 December 2009
Oil prices – US$ per barrel
Oil prices were stronger in December due to a fall in US stockpiles and colder weather across North America
$0
$15
$30
$45
$60
$75
$90
$105
$120
$135
$150
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
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This presentation has been prepared by BT Financial Group Limited (ABN 63 002 916 458) ‘BT’ and is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The presentation has been prepared without taking into account any personal objectives, financial situation or needs. It does not contain and is not to be taken as containing any securities advice or securities recommendation. Furthermore, it is not intended that it be relied on by recipients for the purpose of making investment decisions and is not a replacement of the requirement for individual research or professional tax advice. BT does not give any warranty as to the accuracy, reliability or completeness of information which is contained in this presentation. Except insofar as liability under any statute cannot be excluded, BT and its directors, employees and consultants do not accept any liability for any error or omission in this presentation or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise noted, BT is the source of all charts; and all performance figures are calculated using exit to exit prices and assume reinvestment of income, take into account all fees and charges but exclude the entry fee. It is important to note that past performance is not a reliable indicator of future performance.
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